06 May 2022
For immediate release
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WWF and Aviva urge Government to make climate and nature goals central to economic policy and regulation
- The Government must produce an economy-wide plan to transition to net zero
- A clear net-zero objective is needed in the regulatory framework being developed for the financial sector
- Government should adopt its own transition planning process, to align public spending and policy with net zero
- Transition plans must include measures to protect and restore nature for net-zero goals to be achieved
Ahead of the Queen’s Speech on 10 May, WWF and Aviva have published a new paper, ‘Delivering the UK’s Net Zero Transition’, that maps out the next steps the Government must take to help businesses and the public sector tackle the climate and nature crises.
From 2023, large companies will be legally required to publish plans on how they will cut their climate emissions to net zero by 2050.
In the report, WWF and Aviva argue that delivering net zero cannot just be about setting businesses a target as a whole economy approach is required, with Government setting the direction, and also introducing its own transition planning process, aligning public spending and policy with net zero.
WWF and Aviva recommendations include:
- Put net-zero transition planning at the heart of Government policymaking: Net-zero transition planning should not only be a task for the private sector. The Government must also set best practice by incorporating and delivering its own transition to net zero. Recommendations include, embedding net zero into core economic and financial decision-making processes, producing and regularly updating a UK economy-wide net zero transition plan and introducing Government departmental net zero transition plans.
- Ensure private sector net-zero transition plans are consistent, credible and ambitious: Recommendations include, introducing a statutory objective as part of the HM Treasury’s Future Regulatory Framework to help the UK finance sector align with net zero, amending the Companies Act as well as FCA and DWP rules to ensure that transition planning is embedded across the private sector and developing regulatory guidance in line with best practice and scientific guidance.
- Integrate nature into corporate, finance sector and Government net zero transition planning. Businesses and government must include provisions to protect and restore nature as well as cutting climate emissions, because without investing in nature-based solutions we will never achieve net zero. Recommendations include, embedding nature and climate within UK regulatory and legislative architecture, such as integrating it into Sustainable Disclosure Requirements (SDR) and the UK Green Taxonomy, requiring all principal financial regulators (FCA, PRC, MPC, PRA) to explicitly incorporate nature-related financial risks into their activities.
Together, these changes will help the Chancellor achieve his ambition to make the UK the world’s first net-zero financial centre which he announced at the COP26 climate talks in Glasgow. With the imminent update of the Green Finance Strategy this presents an opportunity for Government to develop and establish a whole economy approach to transition planning.
Tanya Steele, WWF’s CEO said: “WWF and Aviva share the same view - that the world still has time to avoid the worst impacts of a climate catastrophe, but only if all of us, especially governments and businesses, take immediate action.
“Shaping our net-zero future will create jobs and protect and restore the environment but for that to happen the forthcoming Green Finance Strategy must include a coherent transition plan for the whole of the UK economy.”
Amanda Blanc, Aviva Group CEO said:
“Everyone in the UK will be touched by the climate crisis, so all of us depend on shifting the economy to net zero as soon as possible. Preventing the worst impacts of climate change will take all businesses developing ambitious, consistent transition plans to get us to a low carbon future.
“But that can’t happen in isolation - a whole of economy approach to transition is needed, with Government setting the direction. Our joint report with WWF sets out some concrete steps for how to achieve this.”
NOTES TO EDITORS
Delivering the UKs Net Zero Transition is available on the WWF website here:
WWF and Aviva have worked together to promote the need for businesses to publish practical and detailed plans that show how they will cut their climate emissions to reach net-zero by 2050.
Both WWF and Aviva will be deeply involved in developing a framework for private sector transition plans as members of the Government’s Transition Plan Taskforce, launched last week.
Net-zero transition plans should also reflect the need to protect and restore our natural environment, as well as cutting emissions. There is growing recognition that without managing nature loss, the climate crisis cannot be kept in check. We therefore need nature's contributions to be built into plans to reach net zero.
The UK still holds the presidency of the COP climate talks until we hand it over to the Egyptian Government in November. Alok Sharma MP, who acted as president for COP26 in Glasgow, made clear that all of his colleagues must bear a joint responsibility for the UK’s net-zero agenda, and that the international community viewed continued UK efforts as vital.
WWF and Aviva’s recommendations:
1. Ensure private sector net zero transition plans are consistent, credible and ambitious
- Introducing a statutory secondary objective as part of the HM Treasury’s Future Regulatory Framework for regulators to facilitate the UK finance sector’s alignment with net zero
- Amend the Companies Act as well as FCA and DWP rules to ensure that transition planning is embedded across all relevant private sector actors in the UK
- Develop regulatory guidance in line with best practice and scientific guidance
- Embed private sector transition plans within a clear system of accountability and governance, including:
- Setting simple, consistent regulatory expectations for private sector transition plans
- Announce the launch of a verification body for transition plans
- Requiring AGM voting on transition planning
2. Put net zero Transition Planning at the heart of Government policymaking
- Produce and regularly update a UK economy-wide net zero transition plan
- Introduce departmental net zero transition plans
- Establish a central unit to inform, coordinate and push net zero delivery across government
- Embed net zero into core economic and financial decision-making processes
- Ensure key transparency and accountability mechanisms reflect the above actions
3. Integrate nature into corporate, finance sector and Government net zero transition planning
- Incorporate nature related factors into Government, corporate and finance sector net zero transition planning
- Embed nature and climate within UK regulatory and legislative architecture, including
- Ensuring nature is integrated into Sustainable Disclosure Requirements (SDR) and the UK Green Taxonomy
- Requiring all principal financial regulators (FCA, PRC, MPC, PRA) to explicitly incorporate nature-related financial risks into their activities
- Develop a ‘nature positive’ roadmap for the UK economy, to set an overarching delivery framework to deliver on nature goals
WWF and Aviva Group believe these steps will help deliver on the ambition of last year’s announcement on mandatory transition plans, as well as moving closer to achieving the Government’s vision in creating the world’s first net zero aligned financial sector.
- We are the UK’s leading Insurance, Wealth & Retirement business and we operate in the UK, Ireland and Canada. We also have international investments in Singapore, China and India.
- We help our 18.5 million customers make the most out of life, plan for the future, and have the confidence that if things go wrong we’ll be there to put it right.
- We have been taking care of people for 325 years, in line with our purpose of being ‘with you today, for a better tomorrow’. In 2021, we paid £30.2 billion in claims and benefits to our customers.
- Aviva is a market leader in sustainability. In 2021, we announced our plan to become a Net Zero carbon emissions company by 2040, the first major insurance company in the world to do so. This plan means Net Zero carbon emissions from our investments by 2040; setting out a clear pathway to get there with a cut of 25% in the carbon intensity of our investments by 2025 and of 60% by 2030; and Net Zero carbon emissions from our own operations and supply chain by 2030. Find out more about our climate goals at www.aviva.com/climate-goals and our sustainability ambition and action at www.aviva.com/sustainability
- Aviva is WWF’s lead strategic partner in the insurance and pensions sector in both the UK and Canada.
WWF (Worldwide Fund for Nature) is one of the world’s largest independent conservation organisations, active in nearly 100 countries. Our supporters – more than five million of them – are helping us to restore nature and to tackle the main causes of nature’s decline, particularly the food system and climate change. We’re fighting to ensure a world with thriving habitats and species, and to change hearts and minds so it becomes unacceptable to overuse our planet’s resources.
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